The coronavirus pandemic and ensuing recession have brought mortgage rates to all-time lows.
Here’s what this means to homeowners: Now could be a great moment to lower your mortgage rate and save money by lowering your monthly payments or shortening the time frame of your loan.
Here’s how to take advantage of this silver lining of the pandemic.
1. Avoid in-person meetings if possible
Your health is a prime concern today because of the coronavirus pandemic. Fortunately, much of the mortgage shopping, buying and closing process can be done without in-person meetings.
To minimize in-person meetings, ask each lender and broker you expect to use how much of the loan process can be done electronically. Include that question as you shop for lenders.
An in-person meeting may be unavoidable when closing the loan, though. If so, ask the lender or closing agent in advance what precautions they have in place for face-to-face meetings during the pandemic.
One way to keep the closing meeting brief is to get your closing documents ahead of time.
Federal law requires that you should receive a closing disclosure form at least three business days before the closing date.
To make sure that happens, the Consumer Financial Protection Bureau offers the following advice:
“Contact your lender or closing agent (title company, escrow officer, or attorney) at least a week before closing to find out how you will receive your Closing Disclosure.”
2. Shop for the lowest rate
Whether buying a home, a car or a mortgage loan, comparison shopping is always the best approach.
You can comparison shop for your refinance at the Money Talks News Solutions Center. There, you can compare rates from a variety of lenders. Answering a few questions lets you tailor the size and term (years) of the mortgage to your needs.
3. Weigh the costs
Refinancing a mortgage makes sense when the savings outweigh the costs and hassle. So, make sure that’s the case for you before proceeding. Zillow offers a refinance calculator that can make this process easier.
4. Hold off applying for new credit
While you are mortgage shopping, wait to borrow money, open a credit card or credit account, buy a car or apply for credit in other ways.
Applying for credit can affect your credit score, as we explain in “9 Tips for Getting the Best Deal on a Mortgage.”
Keep your financial life steady and normal until after your new mortgage has closed.
5. Bunch up your loan applications
If you are going to make multiple mortgage applications — and you should, to get the best deal — stringing out the process could hurt your credit score.
Solution: Make all your credit inquiries and applications inside a 30-day window. This is better for your credit score. For example, the most commonly used credit score — the FICO score — ignores all mortgage inquiries made in the 30 days prior to scoring. According to MyFICO:
“If you find a loan within 30 days, the inquiries won’t affect your scores while you’re rate shopping.”
6. Have patience
Be patient with the refinancing process. Refinancing can be demanding in the best of times. Note that depending on where you live, city and county offices may be closed — or open, but with limited service — due to the coronavirus.
So, brace for the possibility that getting the county records critical to your refinance — deeds and title searches, particularly — may be a slow process. Even 90-day delays are possible, says the Brookings Institution.
For more information, check out:
How to find cheaper car insurance in minutes
Getting a better deal on car insurance doesn’t have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $ 368 per year, according to the site, so if you’re ready to secure your new rate, get started now.
